September 2007 Vol. 2 No. 9

 Does No Closing Costs Sound Too Good To Be True?  September's Home Value Improver  About Us


Does No Closing Costs Sound Too Good To Be True?

Your father probably told you that there is no such thing as a free lunch. Chances are slim, however, that he ever explained how that adage applies to mortgages. So I will tell you --- there is no such thing as no closing costs.

While closing costs can differ depending on how and where you borrow your money, there are always costs associated with it, and someone (you) is going to pay those costs.

It's important first to understand what people are referring to when they say closing costs. Scratch the surface of the long list of costs associated with closings and you'll see they are things like title search, title insurance, and attorney fees. It can be tempting to look the other way, and just ask for the total amount and where you sign. However, it's important to know all these things and how they are being paid.

If you hear no closing costs, ask this vitally important question: What am I responsible for paying? Someone may tell you that you are getting a no-closing-costs loan, but that you are responsible for paying the borrower fees, for example. Well, those are closing costs. Or, you may be told that you do not have to pay closing costs, but have to pay points. The three parts of a loan that you need to know about are:

  • Interest rate
  • Fees
  • Points

Ask your lender to give you a good faith estimate of the costs you will have to pay at closing ahead of time. They differ from loan to loan, but are generally about 3% to 6% of the mortgage price. It will be nicer to be surprised with a lower number on closing day than a higher number.

When you're spending such amounts of money, you want an open, honest process with as few surprises as possible. Take the time to ask the right questions and find who you are comfortable working with. A mortgage broker is more because, among other things, unlike lenders, a mortgage broker has to disclose to consumers what she or he is making on the loan.

September's Home Value Improver

Spruce Up Your Kitchen for Added Value & Pleasure

In today's real estate market, your home not only has to show well in person, but it also must show well on a computer screen. Buyers have the advantage of peeking inside your home from the comfort of their homes, by looking at listing photos on the Internet. Try to imagine a potential buyer sizing up your kitchen by how it looks on his or her computer.

Although some buyers like renovation and are willing to be displaced from their kitchens, live with dust and noise, and negotiate with contractors for the kitchen of their choice, most are looking for a kitchen that is fresh, clean, and modern. If your last kitchen upgrade was interrupted while you took breaks to play Space Invaders, it's probably time for some sprucing. If you don't have the finances or the will for a full kitchen renovation, do not fear. Take some quick steps that are as light on labor as they are on your wallet.

Match your appliances. If you're happy living with your mix and match appliances, you may not realize that uniform-color appliances are appealing. Order different color appliance doors from the manufacturer so that they all match, and you'll be surprised what a difference it makes.

Upgrade your fixtures and hardware. There are a multitude of faucets and handles at your local home improvement store. Think shiny and stainless to make your kitchen sparkle. You can also find lots of different hardware for your cabinets and drawers. New and stylish drawer and cabinet pulls can make quite a statement.

Replace or repair your cabinets. New cabinets will make a huge difference in the look of your kitchen. If your budget doesn't allow it, you can still add some pizzazz by having your cabinets or cabinet doors refinished.

Replace your kitchen counter. Although it is expensive, granite kitchen counters give the whole room a rich look, as does Corian, soapstone, and some other materials. A few thousand dollars is a lot to pay for kitchen surfaces, but you will probably get it back when you sell your house someday.


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So this week the Fed lowered the federal fund rate for the first time in four years, by 1/2 a percent. Good news, right?

Not so fast. Sure, it will help some borrowers who are in the more traditional adjustable rate mortgages by decreasing the amount of their rate increase at adjustment time. But for the borrowers who really need the help -- those in the subprime loans that can adjust by as much as 7-16% -- this news brings no real relief.

By tinkering with one small economic indicator, the Fed creates a ripple effect into other areas and changes can be positive or negative, depending on your situation. I always think it's best to let the economy run its course naturally, for better or for worse. My two cents, for what it's worth - I'm always happy to hear my readers' opinions on these important issues.

I am also always happy to help you understand the mortgage program you're in. Please feel free to call or email anytime!

Best regards,
Debbie Siegel
Westchester Mortgage

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Click here to read my Mortgage Minute in's monthly newsletter. This month's column: The Good Faith Estimate - Don't Leave Home Without It.

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